Deals and Financings

Shanghai Fosun Pharma (SHA: 600196; HK: 02196) sold ex-China rights for two pre-clinical drug candidates – one treating cancer, the other diabetes – to Sellas Clinicals Holding of Greece (see story). Sellas will make up to $531.4 million in upfront payments and clinical milestones, based on trials in the US and Europe. The cooperation agreement was signed between an indirect subsidiary of Fosun, Chongqing Fochon Pharma, and Sellas.

Fosun Pharma (SHA: 600196; HK: 02196) also out-licensed China rights for the diabetes drug that was part of the Sellas deal to Shenzhen Salubris (SHE: 002294) for 25 million RMB ($4.1 million) (see story). The drug, fotagliptin benzoate, is a DPP4 inhibitor that is used to treat diabetes type 2. 

Morningside Group, a VC/PE firm founded in 1986 by Hong Kong’s Chang family, has invested $10 million into Kona Medical, a US medical device company (see story). Morningside was the only investor in the D round. The funds will be used to develop Kona’s ultrasound device, a potential treatment for hypertension, in China.

Kindstar Global, the China diagnostic testing lab, will begin validating and implementing two cancer tests developed by Advanced Cell Diagnostics of California (see story). Both tests belong to ACD’s RNAscope® platform of molecular diagnostic assays. Kindstar will offer the assays, which it calls a “new generation of cancer diagnostic tests,” through its network of more than 3,300 China hospitals.

Industry Insights

China’s pharmaceutical market will continue to grow at a 17% annual rate from now until 2020, according to analysts (see story). That’s a strong number, even though it is a slowdown from the 21% annual increases over the past five years. In 2012, China booked $98.4 billion in pharmaceutical revenues. By 2020, the market will more than triple, reaching $310 billion.

Trials and Approvals

Boston Scientific (NYSE: BSX) received CFDA approval for the Alair® Bronchial Thermoplasty System, a medical device that treats severe asthma when drugs do not control attacks (see story). Using the Alair System, Bronchial Thermoplasty applies radiofrequency to produce mild heat that reduces excessive smooth muscle tissue in the airways. This lowers the constriction of airways during an attack and makes attacks both less frequent and less severe.

Company News

Adimmune (TW: 4142), the Taiwanese vaccine maker and CMO, is planning to export its flu vaccines to China (see story). The company’s vaccines have passed an initial evaluation and are now undergoing China clinical trials. Adimmune is the only cGMP manufacturer of vaccines in Taiwan. It uses an egg-based culture to make vaccines for Japanese encephalitis and tetanus in addition to trivalent and H1N1 flu vaccines.

GlaxoSmithKline (NYSE: GSK) announced that revenues from its China drug sales fell by an astonishing 61% in Q3 (see story). News of the company’s bribery scandal broke on July 1, so the quarterly results are, unfortunately, an accurate reflection of the fallout from the crisis. According to Andrew Witty, CEO of GSK, the company’s products with China competition – he singled out the asthma treatment Advair – were hit the hardest. Despite the setbacks, Witty declared that GSK remains “totally committed” to China.

Disclosure: none.